Abstract
Kazakhstan is a country rich in natural resources, the majority of which are oil and gas. Since the collapse of the Soviet Union and independence, Kazakhstan has demonstrated a high dependence on oil and gas exports, which has led to volatile economic growth and limited economic diversification. This study assesses the relationship between industrial structure and regional economic performance in Kazakhstan using a panel of regions for 2010–2023. All monetary variables are converted to real per-capita measures and estimated in a log–log two-way fixed-effects model (region and year dummies) with cluster-robust standard errors by region. We find that a 1% increase in real investment per capita is associated with a 0.10% rise in real GRP per capita (p = 0.031), while a 1% increase in manufacturing output per capita is associated with a 0.19% rise (p = 0.019). Mining output per capita also shows positive elasticity (0.12%, p = 0.002). Lagged innovation expenditure per capita is positive but statistically insignificant (0.01, p = 0.311). Results are robust to fixed effects and clustered errors; we outline extensions with Driscoll–Kraay errors, dynamic panels (System-GMM), and threshold tests. Policy implications emphasize strengthening higher value manufacturing segments and improving investment efficiency to support regional income growth.